Turkmenistan: Ashgabat To Allow Independent Survey Of Its Gas Resources

Turkmenistan's Korpeje oil and gas field (file photo) (ITAR-TASS)
Turkmenistan's leadership has boasted for years about its huge natural-gas fields, and has signed multibillion-dollar contracts with foreign countries for most of those reserves. But no independent assessment has ever confirmed that Turkmenistan actually has the resources to fulfill its end of the deals.

Now Turkmenistan is seeking to put all doubts to rest. The government announced this week that the Oil, Gas, Industry, and Mineral Resources Ministry is going to allow an international auditing firm to assess the country's natural-gas reserves.

It might seem odd that a country that has already signed contracts worth tens of billions of dollars for its natural gas is only now allowing an independent survey of its gas resources.

But former leader Saparmurat Niyazov, who died in December 2006, was loathe to allow foreigners on his territory, let alone give them access to Turkmenistan's gas and oil fields. So those interested simply had to take his word that Turkmenistan access to as much as 22.5 trillion cubic meters of natural gas.

Annadurdy Hadjiyev, an independent economist in Bulgaria, tells RFE/RL's Turkmen Service that the information previously available to potential foreign investors was unreliable at best. "Former leader Niyazov spoke about large deposits of [natural] gas located in Turkmenistan based [only] on some sort of research conducted by some unknown auditing firms," Hadjiyev says.

Hadjiyev says that since the international community is frantically seeking energy supplies, many are looking to Turkmenistan and weighing Niyazov's claims that the country has the world's fourth-largest natural-gas reserves, while considering the track records of companies already engaged with Turkmenistan.

"Turkmenistan has already signed a contract with Russia for 25 years of gas supplies and has signed a contract for supplies of gas to China," Hadjiyev says. "The question for all of these consumers, all those who have signed contracts, is: Does Turkmenistan really have these supplies?"

Major Obligations

Based on contracts already signed, by the end of this decade Turkmenistan is supposed to provide nearly 100 billion cubic meters of natural gas annually to China, Russia, and Iran.

And that has not stopped the Turkmen government from talking to other prospective customers. The European Union is increasing its ties with Turkmenistan in a bid to secure some of its gas supplies, and there is still talk of a "trans-Afghan" gas pipeline that would bring Turkmen gas to Pakistan and possibly India.

So the question of whether Turkmenistan really has such large supplies of natural gas is becoming increasingly urgent.

But Turkmenistan's history as an isolated state works against investment, since the government has often made outrageous claims of economic success that could never be independently verified. Hadjiyev says that is why the Turkmen government must now ensure that every step of any audit is transparent.

"If Turkmenistan is prepared to undergo such an audit of all its gas fields, and convince the international community that it has these colossal reserves, then everything must be done openly," Hadjiyev says. "It needs to be clear who the auditing company is, what kind of auditing work is being done, and the final results of this absolutely must be published."

Certainly, few companies are willing to take the risk that China's National Petroleum Company agreed to take in July 2007, when it invested in gas fields in eastern Turkmenistan.

"The Chinese oil and gas company is conducting its own geological survey work. But what is really there [in the gas field]? If they find gas, then they find it. If they don't, then it is their own fault," Hadjiyev says.

The deal with China was a first for Turkmenistan, which previously did not allow foreign companies to set up their own operations and conduct their own independent geological surveys on the country's mainland (as opposed to its Caspian Sea oil and gas fields.)

Hadjiyev suggests that if the independent audit is transparent and supports the Turkmen government's claims regarding its natural-gas riches, it should open the door to other major projects. "No one wants to take a blind risk," he says. But if the Turkmen authorities can prove its claims to Europe, that will help accelerate the Nabucco trans-Caspian gas-pipeline project, which European countries are not fully ready to back, he adds.

The Nabucco trans-Caspian project aims to link the Caspian basin to Austria via Turkey by 2012, and by 2020 it could supply 25 billion-30 billion cubic meters of gas to countries along the route. The planned pipeline would not go through Russia at any stage of its route, one of the advantages that makes it a main energy project supported by the European Union.